Hi Friends,
Nifty has given more than 10% Correction in last 2 months and tested 9950 in March. After this Correction Nifty has started Rising again and it tested 10520 and closed Doji on Friday near 10480 setting confusion in Minds of Traders.
After a 10% Correction this 500+ points Rise is breather to Bulls. Now the question here is whether it's Just a Relief Rally or Start of Bull Market?
Daily Chart Analysis
Let's First look at the Daily Chart of Correction in 2016. After Forming Double Bottom near 7900 with RSI Positive Divergence Nifty Broke out of Down Trend Channel near 8300. It also Closed above 89 Day Ema and Previous Swing High and RSI Broke above the Resistance of 50. Nifty tried to Retest the Breakout near 8300 however closed Positive. After this Bullish Breakout Nifty gave a Robust Rally to 11170 in Next 12 Months.
We have similar Formation on Nifty at Current Stage. After testing 9950 with RSI Positive Divergence Nifty Broke out of Downtrend near 10230. It also closed above 89 Day Ema near 10360 and closed near the Previous Swing High of 10480. RSI has given Breakout above Resistance of 50. Nifty tried to Retest 89 Day Ema but closed Positive. If Nifty Manages to Trade above 10480 consistently on Daily Closing Basis this might be Start of Bull Market in Wave (v).
Weekly Chart Analysis
After The Correction in last Quarter of 2016 Nifty Broke above 13 & 34 Week Ema near 8300 in Jan 2017 to give nearly 40% Rally in 13 Months. Currently Nifty has given Breakout above 13 & 34 Week Ema near 10220 & 10360 respectively. Until Nifty Trades above 34 Week Ema near 10360 we can Expect a Rally in Wave (v) of Bull Market.
Monthly Chart Analysis
In Correction of 2016 Nifty Broke 13 Month Ema for a while and took support of 34 Month Ema near 7900. In Jan 2017 Nifty Finally Broke abv 13 Month Ema near 8300 and gave a Robust Rally to 11170. Currently Nifty has taken Support of 13 Month Ema near 9980 which signifies that Long Term Up-Trend is Intact.
Wave Analysis
Nifty seems to be in Minor Degree Wave 3 of which the Correction in last 2 months seems to be wave (iv). As discussed above the Correction seems over as Nifty Trading above many Resistances. Once Nifty Starts Trading above 10480 on Daily Closing Basis we can Expect a Rally in Wave (v) of Minor Degree Wave 3.
Wave Target
Once the Bull Market is Confirmed as per the Guideline of Wave Equality to Wave (i) we can expect Target of around 12100 for Wave (v). In case of Wave Extension we can Expect a Target of around 13300 which is 1.618% extension of Minor Degree Wave 1. Or near 13500 which is 2.618% extension of Wave (i).
Conclusion
This Analysis will hold true until Nifty trades above 10480 Consistently on Daily Closing Basis. And in case of any Correction will take Support at 10360. Weekly Closing below 10360 will review for Bullish Outlook.
Thanks & Regards,
Harsh Dixit.
Nifty has given more than 10% Correction in last 2 months and tested 9950 in March. After this Correction Nifty has started Rising again and it tested 10520 and closed Doji on Friday near 10480 setting confusion in Minds of Traders.
After a 10% Correction this 500+ points Rise is breather to Bulls. Now the question here is whether it's Just a Relief Rally or Start of Bull Market?
Daily Chart Analysis
Let's First look at the Daily Chart of Correction in 2016. After Forming Double Bottom near 7900 with RSI Positive Divergence Nifty Broke out of Down Trend Channel near 8300. It also Closed above 89 Day Ema and Previous Swing High and RSI Broke above the Resistance of 50. Nifty tried to Retest the Breakout near 8300 however closed Positive. After this Bullish Breakout Nifty gave a Robust Rally to 11170 in Next 12 Months.
We have similar Formation on Nifty at Current Stage. After testing 9950 with RSI Positive Divergence Nifty Broke out of Downtrend near 10230. It also closed above 89 Day Ema near 10360 and closed near the Previous Swing High of 10480. RSI has given Breakout above Resistance of 50. Nifty tried to Retest 89 Day Ema but closed Positive. If Nifty Manages to Trade above 10480 consistently on Daily Closing Basis this might be Start of Bull Market in Wave (v).
Weekly Chart Analysis
After The Correction in last Quarter of 2016 Nifty Broke above 13 & 34 Week Ema near 8300 in Jan 2017 to give nearly 40% Rally in 13 Months. Currently Nifty has given Breakout above 13 & 34 Week Ema near 10220 & 10360 respectively. Until Nifty Trades above 34 Week Ema near 10360 we can Expect a Rally in Wave (v) of Bull Market.
In Correction of 2016 Nifty Broke 13 Month Ema for a while and took support of 34 Month Ema near 7900. In Jan 2017 Nifty Finally Broke abv 13 Month Ema near 8300 and gave a Robust Rally to 11170. Currently Nifty has taken Support of 13 Month Ema near 9980 which signifies that Long Term Up-Trend is Intact.
Wave Analysis
Nifty seems to be in Minor Degree Wave 3 of which the Correction in last 2 months seems to be wave (iv). As discussed above the Correction seems over as Nifty Trading above many Resistances. Once Nifty Starts Trading above 10480 on Daily Closing Basis we can Expect a Rally in Wave (v) of Minor Degree Wave 3.
Wave Target
Once the Bull Market is Confirmed as per the Guideline of Wave Equality to Wave (i) we can expect Target of around 12100 for Wave (v). In case of Wave Extension we can Expect a Target of around 13300 which is 1.618% extension of Minor Degree Wave 1. Or near 13500 which is 2.618% extension of Wave (i).
Conclusion
This Analysis will hold true until Nifty trades above 10480 Consistently on Daily Closing Basis. And in case of any Correction will take Support at 10360. Weekly Closing below 10360 will review for Bullish Outlook.
Thanks & Regards,
Harsh Dixit.
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